DUBAI, 5 August 2004 — Authorities in Dubai have clamped down hard on “unfair competition” in the gold market, the Gulf News reported yesterday.
The Department of Tourism and Commerce Marketing (DTCM) has warned tour guides and taxi drivers not to direct tourists into specific shops at the souq after they were found taking commission from the shops, the paper said.
The department’s directive came up for discussions at the fourth travel and tourism group meeting held recently at the DTCM head office. “We want to provide visitors an opportunity to visit all shops and decide their purchases based on quality and variety,” said Mohammad Khamis ibn Hareb, DTCM director of operations and marketing.
He said what some shops are doing is against the rules of the free market and open competition, and warned that strict action will be taken. Hareb said such unhealthy business practices badly affect the overall business culture. “It limits the shopping options for visitors.”
Tawhid Abdullah, chairman of the Gold and Jewelry Group, said four shops in the souq are ripping off tourists. “This is unethical.”
He said these shops are increasing the price of jewelry to pay commission to the operators. The commission is sometimes 20 percent of the sale price.
Satyam Choksi, owner of a gold shop, said these unfair business practices are being done by a “syndicate”. About 50 percent of the shops in the souq do this, he claimed.
Margins are already extremely small in the gold business. “There are more gold shops here than there are groceries.” This syndicate finds it difficult to infiltrate taxi firms and hence it targets hotel bus drivers and tour guides.
Some tour operators were ambivalent over the circular. Mudi Devendran, manager of Ajman National Travel Agency’s holiday wing, said the whole tourism sector is based on commissions. “Agents get commissions on airline tickets. Guides get commission from hotels.”
He said Dubai has regulated the industry and streamlined operations. “But the souq has not been regulated so far.”
He said there are over 100 tour operators and it will be difficult to curtail these commissions. “We use freelance guides who are licensed. There are pluses and minuses to this move.”
The DTCM has also issued a directive to all hotels and tour operators to report complaints to the Dubai Transport and other taxi companies against drivers.
Representatives from the Gold and Jewelry Group, DNATA, tour operators, travel agents and car rental companies also attended the meeting. Bin Hareb said: “We are constantly trying to find ways to make Dubai a more visitor-friendly destination.”
